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by Catherine Sasman
WINDHOEK – A report issued towards the end of last year asks if international investments in African land are a good thing, or if they amount to a not-so-brand new form of land grab.
Multinational companies in Africa, Latin America and in Central and South East Asia have made large acquisitions of land over the last year.
This has raised serious questions if land, so central to sustainable livelihoods to rural communities, is being alienated.
A study report entitled `Land grab or development opportunity?' written by Lorenzo Cotula, Sonja Vermeulen, Rebecca Leonard and James Keeley, followed trends in at least five African countries to see how this trend is playing itself out.
It looks at large-scale land deals and acquisitions – purchases, leases or other arrangements – as an increasing global phenomenon, while looking at the Sub-Saharan Africa situation albeit with real data and information found few and far between.
Notwithstanding, the report found that 2 492 684 hectares of approved land allocations have been made since 2004 in five African countries such as Ethiopia, Madagascar, Mozambique, Sudan and Mali.
This figure excludes areas less than 1 000 hectares allocated in similar fashion.
It found rising land-based investments over the last five years, possible increases in the size of single acquisitions - such as the 452 500 hectare bio-fuel project in Madagascar, a 150 000 hectare livestock project in Ethiopia, and a 100 000 hectare irrigation project in Mali.
What the study further found is a dominance of the private sector in these land allocations, often with strong financial and other support from those governments and significant government-owned investments.
And not surprisingly, there is also a dominance of foreign investment, although domestic investment plays some part in land acquisitions.
The authors found that the increase in such land acquisitions is due to food security concerns, particularly from investor countries that are the key drivers of government-backed investments.
Moreover, they said, government-backed deals can also be driven by investment opportunities rather than food security concerns.
And the global demand for bio-fuels and other non-food agricultural commodities, prospects of rising rates of return on agricultural land and land values, as well as policy measures in home and host countries seem to accelerate land acquisitions.
For recipient countries, this creates their own set of risks and opportunities. On the one hand, increased investment may bring about macro-level benefits such an increase in the Gross Domestic Product (GDP) and increased government revenues.
On the other hand, said the authors, these land acquisitions result in local people losing access to land and resources on which they depend for their livelihood.
"While there is a perception that land is abundant in certain countries, these claims need to be treated with caution," warned the authors.
"In many cases, land is already being used or claimed – yet existing land uses and claims go unrecognised because land users are marginalised from formal land rights and access to the law and institutions."
Even where land is available, they said, large-scale land allocations may still result in displacement as demand focuses on higher value lands like those with greater irrigation potential or proximity to markets.
"Ultimately, the extent to which international land deals seize opportunities and mitigate risks depends on their terms and conditions…"
But, said the authors, land acquisitions for agricultural investments must be placed within a broader context of foreign direct investments (FDIs) driving economic relations between Africa and the rest of the world.
Over the last 10 years with economic liberalisation, globalisation of transport and communications, as well as the global demand for food, energy and commodities promoted foreign investments in many parts of Africa. This was seen particularly in mining and agriculture.
In 2007, FDI in Sub-Saharan Africa was over US$30 billion, more than the US$22 billion of 2006 and US$17 billion in 2005.
This FDI, suggested the authors, is highly uneven shaped by the recipient countries' resource endowments.
So, is there a scramble for land in Africa? The authors say there is not enough reliable information available to conclude that.
But, they said, some recently announced deals – whether concluded or in planning phases – point to unprecedented scales of large-scale land acquisitions, though it is not a new thing.
In the past, they said, foreign investors commonly acquired land like rice fields and rubber plantations.
Some of the recorded land deals include a consortium of Saudi Arabia agricultural firms called Jenat that have announced plans to invest US$400 million into food production in Sudan and Ethiopia.
Jenat has already invested into 1 000 hectares of land in Egypt to produce barley, wheat and livestock.
A pan-African conglomerate Lonrho has acquired 25 000 hectares of land in Angola and is negotiating for big land deals in Mali and Malawi.
And in southern Madagascar, GEM Biofuels plc has gained exclusive rights for 50 years over 452 500 hectares to plant jatropha for bio-diesel production.
In September 2008 a UK-based energy company CAMS Group has announced that they have acquired 45 000 hectares of land in Tanzania.
The report stated that Chinese State-owned entities have been involved in discussions about land acquisitions around Africa.
Power company, Wuhan Kaidi, has been involved in negotiations in Zambia for jatropha cultivation. Another Chinese company has negotiated for a major land concession in rice and bean cultivation in Mozambique.
But, said the study, there are no known examples of Chinese land acquisitions in Africa in excess of 50 000 hectares.
"China's `Friendship Farms' in various African countries are normally owned by a Chinese parastatal organisation, but are mostly medium scale, usually below 1 000 hectares," the report states.
The researchers said long-term land leases – those for 50 to even 99 years – are not sustainable unless there is some level of "local satisfaction", suggesting business models that promote local participation in economic activities related to these land acquisitions.
This involves out-grower schemes, joint equities with local communities and local content requirements.
"At local level, land rights may be hotly disputed. The local tenure situation may be very complex, involving custody rights. Careful assessment of local context is critical, as well as long-term engagement with local interests (not just elites)," the researchers recommended.
They added: "Governments need to clarify what kinds of investments they want to attract. Given the long-term nature and large scale of much recent land acquisition; strategic thinking rather than ad hoc decision-making is needed.
"Governments should ask hard questions about the capacity of investors to manage large-scale agricultural investments effectively. Land contracts must be structured so as to maximise the investment's contribution to sustainable development.
"Most importantly," said the researchers, "efforts must be stepped up in many countries to secure local land rights. They may help local people avoid being arbitrarily dispossessed of their land, and obtain better deals from incoming investors."